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Microfinance to attain economic independence in Lebanon

Microfinance to attain economic independence in Lebanon

L’Association d’entraide professionnelle (A.E.P.), the Emmaus group in Lebanon, set up a microfinance programme after the war of 1983-1984, in order to help people made vulnerable by the crisis from falling into dependency on welfare. Over time, the Association became a true financial partner, combining loans, guarantee funds and personalised support services. Their beneficiaries are people who have a minimum amount of capital to start their business activities, but which is still insufficient for them to become independent and generate a regular income. They are excluded from the traditional banking system due to their lack of solvency. The aim of AEP’s microfinance scheme is to enable these people to take this step. By the end of 2020, this type of ‘microbank’ had granted 25 million US dollars distributed in 6,300 loans, mainly in the area of trade and services. In rural and agricultural areas, these loans also contribute to raising the status of women, who are very active in this sector.  

The terms of the loan are adjusted to the situation of each individual, but AEP tries to ensure that they assume their responsibility: they must provide a guarantee to the Association, which now collects the payments directly, as the bank branches no longer perform this role since the economic crisis worsened. 

The Association also provides free support to the beneficiaries: awareness of marketing and accounting techniques, follow-up visits to projects, which are evaluated at the end of the loan repayment period, etc. A.E.P. also relies on traditional solidarity networks to encourage regular repayment of loans and strengthen local solidarity. In 2019, before the Covid-19 pandemic and the political stalemate following the explosion at the port of Beirut, the repayment rate of these micro-loans was 97%.